SILVAR has a New Website

The Silicon Valley Association of REALTORS® (SILVAR) has just unveiled a new and informative website. Check out SILVAR’s Web site at www.silvar.org. The new face lift is now more appealing, more user friendly and easier to maneuver. It offers current information about the industry, association news, government affairs, weekly tour sheets and tour meeting agendas. The Press Room section contains local articles about the housing market, events and photos. The public can view a large portion of the web site to learn more about SILVAR, find a REALTOR®, an Affiliate and a home.

RSVP Program to Help Seniors

I had a call from someone in my "farm area" who is a longtime Sunnyvale homeowner, is now disabled and needs help for the most basic jobs. I was pleased to suggest his name for the Realtors' RSVP program.
This community outreach program, called REALTOR® Service Volunteer Program (RSVP), has provided senior citizens with a friendly visit and free assistance with household tasks during a designated week each year since 2001...this year, May 5-9. During RSVP Week, teams of Realtor volunteers and affiliates (professionals who provide industry-related services) will be at residences performing various cleaning and maintenance tasks.
The Realtors' community outreach program was launched in 2001. Last year alone, 450 volunteers provided free help around the house for 274 homeowners.
Seniors can request to have light bulbs replaced, house numbers installed, furnace filters changed, windows cleaned, mattresses turned or new smoke detector batteries installed. The volunteers also handle minor plumbing tasks, plant spring flowers or help with recycling. Homeowners or renters who are advanced in years, disabled or otherwise challenged and live in SILVAR-covered cities and towns can inquire about the upcoming program by calling (408) 200-0100 or clicking RSVP Application.
The deadline for application has been extended, and there is still time to apply.

Big Conforming Rates...No Big Deal

When President Bush signed into law a $150 billion federal economic stimulus package, we thought that he was giving the lenders in our market something
they’ve had trouble finding during the credit crunch: buyers for their big home loans. The measure allows Fannie Mae and Freddie Mac to buy conforming loans up to $729,750, well above the former $417,000 loan limit that the two secondary mortgage market companies were previously authorized to buy under the old guidelines.
Lenders have shied away from jumbo loans as credit market conditions worsened over the past year, contributing to the tightening of mortgage markets across the country. Those old jumbo loan rates ran a full percentage point above the conforming rate.
We hoped that the new "jumbo conforming" rate would be just the thing to stimulate our market...higher loan limits opening up desirable inventory for first-time buyers, with existing home owners jumping into the market. If home owners are able to afford that move-up house, their current house becomes the perfect listing for first-time buyers — and more advantageous financing will be available for these younger buyers too, especially if they go with federally backed FHA loans, which are also raised to the higher limit.
Two problems: The promised "quick implementation" is very slow to come about, and the much-awaited loans in the area between the old conforming and new conforming limits are no better for the consumer than the old jumbo rates. A recent lender quote was 5.875% for loans under $417,000 and 6.75% for those in the "jumbo conforming" category. Much Ado About Nothing.

Cupertino Schools Equal Multiple Offers

Both at our office meeting on Tuesday and the Realtors' breakfast this morning, the main topic of discussion was the continuing strong market for home sales in Cupertino and Westside Sunnyvale. Despite the national slowdown, and even the local downturn in many areas, this "Oasis" remains hot.
In an article in this week's Cupertino Courier,titled "For sale" signs aren't up for long in Cupertino despite downturn," Emilie Crofton quotes Mark Burns, Cupertino resident and a successful agent in my office as saying that Cupertino had the highest percentage of pending sales, 42 percent, during the month of February in Santa Clara County, and "Real estate sales are moving at a brisk pace, as they have for the past few months. There are still a number of homes selling for above their asking price. We'll usually see homes come up for sale and sold within two to three weeks while it can take months in other areas."
The reputation and success of Cupertino's elementary, middle and high schools is the main reason why the city has remained untouched by real estate troubles. The quickest sales seem to be in the Lynbrook and Monta Vista high schools' attendance area. In addition to schools, Mark also credits the market in Cupertino to the city's neighborhoods, parks and proximity to freeways for short commute times.
But don't forget...March through May are still the strongest seasons. Inventory grows in the summer, and the market tends to slow down.

Trees vs Solar…It’s All in the Timing

The Sunnyvale battle between two environmentalist neighbors is over, with the losers being two healthy redwood trees. The couple was criminally prosecuted because their backyard trees, planted before their neighbor installed an elaborate solar system, cast a shadow over those solar panels. After spending more than $37,000 in legal fees, they can’t afford to appeal the ruling to remove the trees.
The sad thing is the timing. Senator Joe Simitian is introducing a bill to change the state law. If it passes, trees planted before a neighbor installs solar panels will be allowed to remain, even if they continue to grow and cast a shadow over those panels. If trees are planted after the solar panels are installed, they must be removed if their shadow eventually impedes the use of the panels.
Perhaps this is still a win-win situation. Only two of the eight redwoods have to come down. In December, the judge ruled that six could remain.

Surviving a Real Estate Slowdown

Stacey Moncrieff, editor in chief of NAR's Realtor Magazine, often hears newer agents say that there has never been a market like this one. Those of us who were working in the field during the recession of the mid '80's remember slow sales and depreciating values that more than rival this market. She included an article that she wrote in 1990, entitled "Turn up the Heat in a Cold Market" so that recently licensed Realtors could see that this has happened before, in the not too distant past.
A truly depressed economy faced the Gulf states when the oil industry bottomed out in the mid-eighties. Not only were oil workers losing their jobs, but tax revenues on oil and gas sales dropped, which in turn, affected the state budgets. We had investments in Texas properties at the time, and lost all our equity when rentals sat empty, and interest rates soared to eighteen percent.
No matter what today's market brings, seasoned professionals who’ve experienced many business cycles know that a slow market can actually be a great opportunity.

A Hard Water Solution

Sunnyvale has wonderful drinking water. In this age of bottled water that costs more than gasoline, it's good to know that we have clean and tasty water coming from our taps. However, as I learned after my second instant hot water gadget corroded, there is a price to pay. This tap water is also extremely hard, and corrosion can build up in pipes and our hot water heaters. Water softeners are one solution, but must bypass the cold water pipes, because of excess salt in the process, not suitable for drinking.
Mr. Handyman sent me an email, describing a device that de-scales piping systems and hot water heaters and prevents future scaling from occurring. It clamps around the cold water pipe entering the water heater, is then plugged in, and works by emitting a somewhat random electro-magnetic field thereby causing the minerals in your water (which are apparently magnetic) to constantly jerk around in your plumbing system, which in turn causes them not to adhere to the side of the pipes and water heater. The device will even de-scale the mineral deposits that have adhered to the sides of your pipes and water heater.
He tested it, and it works. His wife has a very sensitive sense of smell and is very bothered by spotted glasses coming out of the dishwasher. She now claims the glasses are never spotted, she no longer buys the anti-spot rinse agent, and the funny smell the dishwasher has given off for years is gone.

A Paperless Society?

I was sitting with my clients at the title company last week, along with the escrow officer and the lender. It was a very friendly, relaxed signing, and everything was going smoothly. We started to talk about the amount of paperwork needed to close an escrow. This closing package was relatively small by industry standards, since there was only one loan involved. Second loans require an additional set of documents, and government loans, even more. Some of the worse offenders are condo sales, with their big pile of disclosures and CC&R's.
Years ago, we thought that the computer would free us from these piles of paper. I remember seeing a futuristic film at a Realtors' Convention that showed the buyers coming to a house with their agent, accessing a touch tone screen that brought up the sellers and their agent in a three-way video call, and pressing a few buttons to confirm a sale.
No such luck. We have more paperwork than ever. The documents required to take a listing or write an offer increase every year. We do have online disclosures, but all that means is that the selling agent prints them out instead of the listing agent. The pile of paper remains the same, and our recycling bins fill up quickly.

Beware of Tax Scams

Along with the taxman comes an inevitable new breed of scam artists. That's why you need to be on guard--especially for unscrupulous scammers, who are sending emails that appear to be from the IRS. The content of the emails are often written to persuade you to link to a website that will allow you to update your data or receive important information.
Remember, these phony emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, to offer a larger refund, or sometimes, ironically, to protect you from identity theft or loss of privacy.
What Can You Do to Avoid Falling Prey To One Of These Scams?
Always Be Suspicious of Emails. Remember, the IRS does NOT initiate communication with taxpayers through email, and requests that you forward all questionable emails to phishing@irs.gov.
In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will rarely, if ever, ask you to divulge personal information via email.

Larry Stone, County Assessor, Spoke

We had Larry Stone as our guest speaker at the Realtors' tour meeting this morning. It was very interesting to learn what the impact of this market has been in his office this year, and also to hear about the history of tax assessments in the county.
Proposition 8, passed soon after Prop. 13, requires county assessors throughout the state to bring the taxable value down, if properties should lose value. Over 26,000 properties will be reassessed this year in Santa Clara County (97% are residential). To put that figure into perspective, Contra Costa County will revalue 176,000 homes this year.
In the real estate "down years" of 1990-1995, 20-25% of area residential properties had their tax base reduced temporarily, then in 1996 the values started to move up, until the dot-com bust of 2002.
Our county has the fewest assessment appeals in the state. The highest year was 1996, and even then there were only 7300.
My clients ask when a property is reassessed. If it's new construction, it will be...and the "leave up one wall and avoid reassessment" theory is a myth. Remodels are generally not reassessed unless there is an addition to the square footage of the house, or if it is so substantially improved that it is equivalent to a new home. A transfer deed obviously signals a reassessment of value, but there are exceptions to this. If the deed is from parent to child or vice-versa, from grandparents to grandchildren (if the children are deceased) and under Prop. 60 or 90 for seniors. For more information, check out the Santa Clara County Assessor's website.

The Volatile Stock Market and Real Estate

Well, yesterday I sat in the dentist's chair, watching CNN while the Dow and NASDAQ moved up like crazy because of the Fed's moves to try to shore up the economy. Today, I'm at the computer watching those indicators move back down again. Since I'm not a day trader, I'll just hope that the people at Vanguard who manage my investments know what they're doing.
The banks and the investment company that benefited from Bernanke's decisions don't seem to feel secure enough to roll those benefits into the hands of potential mortgage holders, though.
Although rates on 30-year mortgages dipped slightly last week, it is more important than ever for potential home buyers to have a good credit score. Consumers should obtain a credit report and take care of any outstanding issues that can be fixed or improved prior to applying for a loan. According to a recent Federal Reserve survey, some 53 percent of lenders tightened requirements for prime-quality borrowers, 72 percent for sub-prime borrowers, and 85 percent for non-traditional mortgage borrowers, including ARMs, loans with interest-only payment structures, and other such products.
Beginning this week and continuing through September, the Federal Housing Administration (FHA) is mailing 850,000 letters to at-risk borrowers who have already faced or are experiencing the first reset of their adjustable rate mortgages, and live within geographic locations that are currently subject to FHA loan limits nationwide. If this has the intended effect of keeping those at risk out of foreclosure, maybe it will help shore up the housing market and the state’s economy. We can only hope...

We're Planning a Shredding Party

I have boxes of obsolete documents stored in my garage...tax records kept way beyond the period that is recommended, and real estate files from twenty years ago, when prices were around $300,000 in Sunnyvale.
But criminals are taking their victims trash to sort through and find any personal identification they can use to assume one’s identity and create new financial transactions at their victim’s expense.
That is why our office has decided to host a "Community Shredding Day" within the next month, so that the agents and our clients will be able to finally dispose of all this stored clutter in a safe way.
We'll be bringing a shredder truck into our parking lot, and making it available to the community. I'll write another post when I have the date and details...but start filling those boxes!

Taxes: So What Happens When I Sell?

Clients often ask about the new tax laws regarding the sale of their property, and of course, I send them to their CPA or tax advisor, but here are some general rules.
The best tax shelter available to home sellers comes from the Taxpayer Relief Act of 1997, which allows married taxpayers to keep up to $500,000 profit ($250,000 for individuals) tax-free when they sell their principal residence. The "two out of the last five years" provision still applies, but as long as you've lived in the house for those two years, you can use this exclusion over and over.
Remember, the taxable capital gain is reduced by the amount of your selling costs...such as sales commissions, title insurance, and inspection fees. Any decorating, repairs and maintenance work completed within 90 days of the sale are also considered selling costs.

The Tax Rules on Mortgage Loan Interest

Because mortgage interest payments make up the largest part of loan payments in the early years, this is usually the biggest deduction available to homeowners. Interest secured by a first or second home is deductible up to a maximum of a million dollars of debt. But remember, this is not a blanket amount. It applies only to the amount of the original purchase, plus any capital improvements. Home equity loan interest, limited to $100,000, is also deductible.
Don't forget that the interest on a home improvement loan, while deductible, refers only to capital improvements (major changes like a room addition, a new roof, or making a property usable by people with disabilities) not general upkeep or cosmetic changes.
Interest on repair work is deductible only when you use a home equity loan, and up to the allowable limits.

Taxes and Real Estate

I am so happy. Even if I have to work this weekend, I feel free now that my taxes are done. It is like completing a huge homework assignment that has been hanging over your head. I put all my records on Quicken throughout the year, and then transfer them to Turbo tax, but it is still a chore.
Several of my clients have asked about tax tips for 2007 filers who are homeowners.
The mortgage insurance deduction has been extended for four years, through 2010. If you paid mortgage insurance premiums, you may be entitled to this deduction...the catch is that families with an adjusted gross income of more than $100,000 (try buying a house with less income in this valley!) are not entitled to the full deduction.
For those who were caught in the foreclosure trap, the federal debt relief bill keeps you from having to pay taxes on forgiven debt on their principal residence, from foreclosure, short sale or loan restructuring from 2007 to the end of 2009. The state is still working on an equivalent bill.
More tax pointers in tomorrow's post....

Smoke Detectors Save Lives

When we did a property inspection at my townhouse listing, the smoke detectors weren't working. Unfortunately, it's all too common for someone to "temporarily" borrow the battery to use in a toy or other gadget and forget to replace it.
Most fatal fires occur at night, and every home needs working smoke detectors to provide an early warning.
Some pointers from the Ca Fire site:
Install smoke detectors in all sleeping rooms,
hallways that lead to sleeping areas, basements, and each additional level of your home. Call your local fire department if you are unsure about placement.
Smoke detectors should be mounted on the ceiling 4” from the wall; wall mounts should be 4-12” from the ceiling. Do not install near draft areas such as, windows and vents.
To keep your smoke detector working, change the batteries every six months and vacuum at least once a year. Dust and cobwebs can impair sensitivity.
Test Your Smoke Detector! Most detectors have test buttons.
Remember, almost everyday a smoke detector saves somebody’s life…it’s up to you to protect yourself and your family.

www.fire.ca.gov

A Confused, and Confusing Mortgage Market

I hope that the Federal Reserve's plans to pump liquidity into distressed financial markets will improve the situation of our rather neurotic loan market.
Last week, buyers of a townhouse listing of mine priced interest rates on Monday, and were quoted 5.5% (3 year fixed, then adjustable). On Wednesday, it was 6%; by Friday, 7% was the best that they could do. We negotiated an extra ten days on the close of escrow, hoping that this confusion in the mortgage market would iron itself out in the next couple of weeks.
If the rally in the stock market is any indicator, maybe the banks and investors that buy these "packaged" loans will also be reassured and some degree of normalcy will take place soon.

A New Alternative when Staging a Home

Today we toured a new townhouse listing in a popular area of northern Santa Clara. The owners had moved out, and it was beautifully staged, something that Realtors and buyers have come to expect. The "twist" is that the furniture was bought, not rented, from a warehouse that stocks good quality used furniture. The living room, dining room, and bedrooms were attractively decorated, with finishing touches, such as throw pillows, mirrors, and art, provided by the sellers and the Realtor.(Most of us keep a collection of mini-staging items, including towels and linens.)
The cost of purchasing the furniture was actually less than we pay stagers, and the advantage is that there is no ongoing rental fee if the place takes longer than a month to sell...quite possible in a changing market. When the house is sold, the buyers might want to keep the furniture, or if not, it can be a generous donation to charity.

7 Tools For Relocation

If you are considering relocating, there are many factors to take into consideration. The Move Advocate provides a comprehensive menu of Relocation Tools to assist in the relocation process. From calculating potential expenses to choosing the right community, these tools can help with any move, whether local or cross-country.
Once on the site, click on the Relocation Tools tab, and you're in!

The Community Search will find the top 25 cities that best suit your lifestyle. Simply select the state and the characteristics most important to you.
View the Cost of Living for hundreds of U.S. cities. The Cost of Living Analysis identifies important city facts such as cost of living, climate, demographics, and other vital information.
Compare the salary equivalents of thousands of U.S. cities.
The Crime Comparison has crime indexes for thousands of U.S. cities as well as some Canadian cities.
Other useful features:
Use the calculator to estimate interstate moving cost in the continental United States. This calculator will compute the monthly principal and interest payment on a mortgage. It does not include insurance or taxes. To use the calculator, type over the default values (do not use commas or dollar signs anywhere) and press the calculate button.
You can also access more than 100 million property, ownership, sales, and mortgage records, covering more than 85% of the U.S. population.

A Lucky Property Tax Break for California Seniors

The Mercury News had a feature from a national news service in this weekend's Real Estate section. The cover story described an older Florida couple who wanted to downsize from the home that had become too large for them once their children were gone. Unfortunately, they discovered that by leaving their big house for a two bedroom home, their property taxes would more than triple. This couple decided to free some of their equity with a reverse mortgage, and stay in their too-large home. My sister and her husband, who also live in Florida, are in a similar situation. They would love to sell their house and move into a new development nearby, but are trapped by the possibility of a huge increase in property taxes.
Because of Proposition 13, and its outgrowths, Props. 60 and 90, California homeowners are not put in this position. If they are over 55, they can "move down" to a smaller, or less expensive home and retain their existing taxes. If they want to stay in their existing home, a reverse mortgage is still always a possibility.

Top Retirement Destinations

Because I have the SRES(Seniors Real Estate Specialist)designation, I often work with retirees. One of the frequent questions I am asked is what areas seniors should consider for retirement.
When it comes to the most popular retirement spots, you already know many of the usual warm-weather favorites. In fact, a recent Harris Poll confirmed that rural California, Florida, Hawaii, North Carolina, and Oregon are the most popular places where people aged 62-plus would choose to live. Realtors in those locations, and in Arizona, Nevada, and Washington State...destinations that many of my clients favor...should be prepared for an influx of retirees.
Last year, Bizjournals.com did a comprehensive report on the hottest retirement destinations and found some surprising results. Urban destinations making the top-ten list included Portland, Maine; Youngstown, Ohio; Pittsburgh, Pennsylvania; and Knoxville, Tennessee. Top small-town destinations included Gardnerville Ranchos, Nevada, Pahrump, Nevada, Del Rio, Texas, Brevard, North Carolina, and Ocean Pines, Maryland.

New Loan Ceiling for FHA in the Valley

When I first came into the business of Real Estate in 1972, most of the loans that secured our home sales were either FHA or VA. In fact, our first house in Sunnyvale was financed with an FHA loan...an Eichler that we bought for $26,000! But times have changed, and home values have grown exponentially. The FHA loans, with a cap of $362,790, were almost never used in Santa Clara County.
Now the U.S. Department of Urban Development has temporarily raised the maximum allowable loan amounts to $729,750 for expensive areas such as ours. Fannie Mae and Freddie Mac limits have also been raised, but the interest rates on those are still a full percentage point higher than those at the old conforming rate of $417,000.
Our in house lender, Princeton Capital, is already ready to handle these low down payment loans, but some mortgage brokers are rushing to learn the FHA guidelines.
Realtors will also have to include a couple of new forms with their offers, but all in all, this is a welcome addition to the local loan situation.

Is Now the Time to Refinance?

This morning's newspaper carried an article that said Fed Chairman Bernanke is pressing lenders to lower rates. As I drove back from the office today, I heard at least three offers to refinance home loans on my car radio.
If you missed your chance five years ago, this might be the time. The credit crunch had produced the lowest rates in years. A refi now should appeal to three groups: those who have scary interest-only or negative-amortization mortgages, those whose credit scores have improved since they took out their original loans, and those who have adjustable loans that recently (or will soon)reset.
If you have a loan of over $417,000, it would make sense to wait until the higher conforming rates kick in...sometime this spring. But if you can match the new, tighter guidelines... a credit score of 680 or better, at least 5 to 10% equity in the house, refinancing may make sense, especially if you can save a full percent on the interest rate and intend to stay in the house for five years or more.

Great Financial Websites

I like to share tips that I pick up from Newsweek Magazine, and this month, they list some really helpful websites that can help us all.
For Retirement Planning:
Taxadmin.org: Useful for planning retirement to a low tax state, or vacation in states with low (or no) state sales tax.
For Daily Spending:
Pfadvice.com: Shared money-saving tips on everyday expenses such as groceries, pets and gardens.
Retailmenot.com: Easy couponing, with discount codes for nearly every online and retail store.
For Mortgage Holders:
Hsh.com/usnrcalc.html: Should you refinance? Here is a really useful calculator for comparing the loan you have now and the one you're considering.

Sunnyvale Town Center...Redwood Square

Sand Hill Properties, the developer of the new Sunnyvale Downtown Development, is refining plans for Redwood Square, which will be the centerpiece of the plan. They are adding new lighting designs, a larger stage, and more lawn, sloping up to the five historic redwoods that serve as the focal point of the square, which covers nearly a full acre of land near South Murphy and McKinley Avenues.
Besides preserving the beautiful trees, Sand Hill has also saved 50,000 square feet of tiles and thousands of linear feet of redwood timbers from the old mall, and they hope to reuse these materials in the new Redwood Square.
Last week, I spent a wonderful lunch hour dining outdoors at Santana Row, enjoying the sunshine, the atmosphere and the people watching. I can't wait until I can do this in Sunnyvale's Redwood Square!

Naglee Park, a Small Town in a Big City

Yesterday, my clients and I met the property inspector at their new purchase, which they describe as a "turn of the century-eclectic." It's the architectural equivalent of a mixed breed dog that has more personality than one with a pedigree. The Naglee Park neighborhood in San Jose where it is located is like a small town in the Midwest instead of part of a major California city.
I was sitting on the front porch to get some sun...the house was very cold inside before the inspector turned on the heat...and while I was out there, several neighbors stopped by to meet the new owners, so I called for them to come outside, too. One man was walking his dog, another couple was pushing a baby carriage, and a third family was accompanying a little girl who was selling Girl Scout cookies. (My clients bought two boxes of thin mints.) The street in Palo Alto where my son Daniel lives with his family is very much like that, too. Block parties, get-togethers, etc. What a great place to live!